The Uganda Alcohol Industry Association has urged Parliament to reject a proposed increase in excise duty on locally produced beers, warning that it could lead to reduced consumption, lower tax collections, and harm to farmers.
"Passing section 3(b) of the Excise Duty Amendment Bill 2025 will make beer prices rise by up to 40%, reducing consumption, hence leading to low tax collections," Emma Njuki, legal and corporate affairs manager at Uganda Breweries, told the Finance Committee.
Njuki also warned that the tax hike could disrupt the agricultural supply chain, affecting over 25,000 farmers who supply sorghum and barley to the breweries.
"The country will face an immediate reduction in demand for sorghum and barley," he said.
The association also highlighted that 65% of alcohol consumption in Uganda is unrecorded, and higher excise rates could push more consumers towards unsafe, untaxed products, eroding public health gains and government revenues.
Committee members were divided on the submission, with some supporting the dropping of section 3(b) of the Excise Duty Amendment Bill 2025.
The debate underscores the complexities of tax policy and its potential impact on various stakeholders.